Doctor with Digital Data Device

Companion devices, a term used to describe non-invasive health devices that accompany drugs, are a promising space for innovation in the biopharma world. These devices can be used to track essential information related to the effect and delivery of drugs, which is improving our ability to understand factors such as those limiting patient’s proper medications use and develop better delivery mechanisms. This can increase the value of individual treatments, and create opportunities to extend patents.  When they take advantage of mobile health (mHealth) capabilities, these companion devices enable remote monitoring of a patient’s health data, which opens up the opportunity for personalized care at a frequency beyond the regular follow-up and allows the physician to react sooner if a change in treatment regimen may be required.

While the value of these devices is evident, the challenge is in making it financial viable and be reimbursed for pharma to invest in those companion devices It is also important to understand what steps manufacturers need to take to get these companion devices on the market.

While mHealth is expected to revolutionize patient care delivery, it has not yet realized its full potential in part due to unclear reimbursement guidelines. To help alleviate these barriers, we recently conducted research into various reimbursement pathways, assessing the benefits and risks of each. Here’s what we found.

Three ways to get paid
There are three distinct reimbursement pathways that companion devices can chose from, these are not mutually exclusive, and in fact combining the three approaches can result in better reimbursement.

Mobile Prescription Therapy (MPT). These mobile applications, which live on the patient’s smartphone or mobile device, provide patients with real time education and guidance about their condition, and provide feedback to the physician about the patient’s status. One of the most well-known examples is Welldoc’s BlueStar, which was the first mobile app approved by the FDA for management of Type-2 Diabetes.

MPT applications follow a prescription-based payment pathway for patient-level decision-support to healthcare providers. The downside of this reimbursement pathway is that developers of these applications will need to provide some level of clinical trial evidence to establish the utility, safety, and usability of these tools. WellDoc, for example, underwent a year-long randomized clinical trial to prove that its product worked before receiving FDA marketing authorization.

Disease Centered devices used in the clinic. These devices are used by the physician within the care environment to capture data about the patients’ conditions and interpret it in real-time to make care decisions. The automation of this data capture can help streamline the treatment process, and alert physicians to anomalies in a patient’s condition. When used effectively, this data could help hospitals improve their quality of care measures by more proactively identifying and addressing the needs of patients at risk.

Because these devices are used by the physician in the care facility, the reimbursement pathway is via CPT codes, which is a well-established pathway that clinicians are already familiar with. Notably, starting in 2015, there are new provisions in the US for reimbursement of remote chronic care management, to remotely monitor and manage patient’s chronic symptoms, which aligns with the development of these technologies and may provide a basis for early adoption and market entry. However because these devices are still relatively new, the codes are still in flux, which may make the adoption process more complicated. For risk averse care facilities, this could be a barrier to adoption.

Drug-device combinations. These devices combine a drug with a device for an innovative delivery or monitoring system, such as inhalers, transdermal patches, and nebulizers. One of the great benefits of these devices for manufacturers is that they can extend the patent on a drug by combining it with a novel delivery system. These devices will need to undergo extensive clinical trials, however these trials can be conducted in combination with trials for the drug itself, which may alleviate concerns around time to market.

Just the beginning
Although still relatively nascent, companion devices are expected to play an important role in patient care going forward, from prevention and diagnosis, to treatment and patient monitoring. However, the reimbursement pathways for these devices are still being carved out, so it is vital for drug and device manufacturers to pay close attention to developments in this space. Adoption will rely in large part on improved patient awareness, greater physician engagement to integrate the devices into their care processes, and demonstration of long term ROI to facilities and payers to reinforce the value proposition of these devices.

Early wins, like Welldoc’s BlueStar, can act as a roadmap for the next generation of companion devices, but it is essential that makers do their research, so they understand what evidence they will need to win support, approval and reimbursement to get the most value out of these innovative solutions.


Topics in this blog post: Biopharma, Clinical Trials, Market Access, Payers